Economists discuss how Trump’s proposed tariffs could affect Kentucky
Republished from WEKU.
President-elect Donald Trump has proposed higher tariffs on imported goods as part of his second term’s policies. That could affect certain industries in Kentucky.
It’s still uncertain what the incoming administration will end up implementing, but he has proposed a blanket of up to 20 percent on imported goods, and a 60 percent tariff on goods from China.
Tariffs are taxes a government can impose on both imported or exported goods. Higher tariffs mean higher prices for both businesses and everyday people. But it also encourages more local production from manufacturers.
Omar Ayyash is the President of the Kentucky World Trade Center. He says higher tariffs could affect Kentucky’s auto manufacturers.
“While we’re manufacturing here, there are auto parts that are being imported, and that might impact the tariffs on these imported auto parts and thus eventually increase the cost,” Ayyash said. “But ultimately, we also have to look at it from a protectionist perspective.”
Ayyash says he’s optimistic that higher tariffs could lead to more manufacturing to happen in Kentucky, boosting employment and investment.
Higher tariffs could also affect local exports. Mike Clark is the director of the University of Kentucky’s Center for Business and Economic Research. He says other countries could impose their own tariffs towards the U.S. in return, which could affect what goods we send to other countries.
“That’s particularly an issue for Kentucky, because we do export a pretty large percent of our GDP,” Clark said.
Exports accounted for 14.5% of Kentucky’s Gross Domestic Product last year, which measures the total value of goods and services produced. The U.S. exports around 10% of its GDP in comparison.
Clark says it’s too early to tell how industries will be affected until a formal proposal from the Trump administration is made.
Both Clark and Ayyash say immigration policies could also affect Kentucky’s economy, as well as supply chain management and how national debt will be handled.
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Originally published by WEKU.
Republished with permission.
